Looking For Investing? Learn More About Investment House Mortgage Rate

Are you looking for something to invest in? Well, one of the basic knowledge is to learn more about the investment house mortgage rate.

Ever heard of that? If you have, good for you, but for all of the young people that haven’t heard, this article will guide and help you learn more on that topic.

Current Investment House Mortgage Rate

Before that question is answered, we first must know that the investment house mortgage rate is always higher than your primary residence.

Why? It’s common logic, especially during the pandemic era, that people will usually be bailed on rental or investment house mortgages rather than their current residence.

If you asked how high it can get? That will depend on your creditworthiness, down payment, and also the type of investment property you have chosen.

You can find out that the interest rate of your current investment house mortgage rate is between 0,5% up to 0,75% higher than your primary mortgage rate.

That calculation is based on the lenders’ consideration that rental and investment house mortgage is a riskier loan product.

That’s why they will charge a higher interest rate followed by stricter qualification rules for all the borrowers.

So the current investment house mortgage rate is usually 0,5% to 0,75% higher than the standard one.

That’s why today’s average rate for a primary residence is between 4,5% APR, and for a single-unit investment property will be around 5% to 5,25%.

Those calculations are based on a prime borrower profile with a credit score of 740 and a down payment of around 30%. Of course, the interest rate will be higher if you pay a smaller down payment and a lower credit.

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Investment House Mortgage Rate

Consider These 4 Things That Affects Your Investment House Mortgage Rate

Guidelines from Freddie Mac and Fannie Mae are not the only things that will affect your investment house mortgage rate. If you are wondering what else, these 4 personal factors below can affect you too.

  • DTI or Debt-To-Income Ratio of borrowers
  • Borrowers’ credit score
  • Borrower’s Cash reserves
  • LTV or Loan-To=Value of investment house.

Can You Lower the Investment House Mortgage Rate?

There is nothing impossible in this world, right? But of course, you have to do these steps to get a lower investment house mortgage rate.

  1. Pay a bigger down payment if you have the money.

If you can pay at least 20% down, your added cost will disappear. Or you can just buy a cheaper house if you want to.

  1. Made improvement on your credit score

Lenders usually will finance your purchase if you are choosing a conventional loan.

  1. Submit your loan applications multiple times

By doing it, you could reduce the high mortgage by nearly 5%. You can search at least more than five times to get a lower mortgage rate.

So that’s sum up this article about investment house mortgage rates, have you planned out your investment yet? You can also try HELOC for investment property too, have fun studying!

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